A few weeks ago, I was doing hard time with people who, due to fairly outrageous "re-offender" statues, were serving 15 years for stealing $50 items, or 5 for walking out of Home Depot with a couple hundred dollars in a cart.
These assholes steal millions, often from the elderly who trusted "the system", and just walk away scot free because the jury doesn't understand it? It is beyond outrageous and really shows, to me at least, how our entire CJS in the US has become an sick disgusting joke.
I got 15 months for having a small amount of heroin and an oz of weed...I almost lost almost everything I owned and left my clients in a big mess, and these guys don't get any time or even a felony conviction to mess up their lives like mine does?
Fuck them and fuck the douchebag prosecutors who are afraid of losing one damn case and messing up their all important conviction ratio.
I think you misunderstood the point of this article. It's not that the prosecutors are "afraid" of losing a case, it's that they are demonstrably losing these cases. And the reason appears to be that the circumstances are too complex for juries to understand. That is a systemic problem, one which we don't have a good solution for.
The response from the Justice Department seems to be, instead of failing at doing the same thing over-and-over, let's do a different, simpler thing. I agree that is not a good thing. But I don't think it's reasonable to argue they should keep doing the same thing over-and-over, expecting failure. And I don't have enough insight into the problem to say how they could successfully prosecute these complex cases.
>> That is a systemic problem, one which we don't have a good solution for.
There is a pretty straightforward solution. I'll leave to the reader whether or not it is a good one.
Redefine the crimes so they are easier to prove. In many cases that is going to involve moving from a mens rea (guilty mental state) of intentionally to recklessly, negligently or even eliminating mens rea altogether and just requiring an actus reus (guilty act). In some cases that might mean criminalizing more acts of omission instead of requiring proof of an overt bad act.
I want to be clear that this wouldn't be costless. It goes against much our existing framework for what makes people criminals. It would increase the chance that someone who made honest mistakes would be criminally punished. But remember Blackstone said that it is better for ten guilty men to go free than one man suffer, not one hundred, not one thousand and certainly not all the guilty men. And he was writing in an era when all felonies were capital crimes.
A small percentage of murderers getting off on technicalities is something a society can live with, even be proud of in a strange way, but when the exception swallows the rule that society is playing with fire.
What exactly in what I wrote suggests throwing out centuries of jurisprudence? There are already strict liability crimes, much less recklessness or negligence crimes, as well as crimes of omission.
Also what crime were you accusing me of having committed? Unlawful proposing of legislation Morgante doesn't like?
Strict liability crimes are a travesty against justice. They really shouldn't exist; we should be looking to remove the ones we have rather than adding any more.
(GP wasn't claiming that you were literally committing a crime, rather suggesting that making it easier to convict innocent people would be a "crime" in a rhetorical sense)
If financial institutions can commit complex theft on a massive scale without prosecution then the economy will fail.
What value does money have if theft occurs on that scale regularly? Why invest in industry when it's more profitable to invest in theft?
That would be what most people mean when they say they laws are not working. Similar to how, if our laws allowed highwaymen to get away with murder, we'd say they were failing us even though they were working perfectly to protect armed robbers.
Interesting idea, sort of a strict liability approach.
If I'm a superqualified, incredibly careful, good-guy explosives chemist, I still don't get to whip up a batch of Octol in my garage. The law deems explosives manufacture an inherently dangerous activity subject to strict liability. No mens rea needed, intent is irrelevant, conduct is all.
Strict liability principles have worked fairly well. Maybe they're worth trying in the financial sphere. I wonder how we would define an inherently dangerous financial activity?
The question should be are those cases really that complicated or does the defense makes them overly complicated because they can afford too?
People who steal millions or billions can hire an army of lawyers that can bring so many expert witnesses that can make the jury doubt in the existence of the Sun beyond a shadow of a doubt.
Several years ago there was a case that a guy got caught speeding, he petitioned the laser speedometer thingie to be sent to a impartial lab for testing on his own dime and got enough expert witnesses to rip that thing to shreds claiming that the device was inherently flawed and that the police didn't calibrate it and maintain it properly including leaving it locked in the car where the high temperatures could affect it's accuracy.
He then also went own and brought evidence that other police equipment like the speed tracking radar might not be accurate on his car because of it's design and the fact that it was build of composite materials and not metal which what the speed tracking radars they use are calibrated for.
This case and several like it combined lead to a sweep of people appealing every speeding ticket which eventually got a law passed that every speed enforcement system which gets certified by the local standards institution cannot be brought to question in court.
When you drive a car with 5 or 6 zero's in it's price tag you probably have 10 more zero's in your bank account, which means you can spend allot of money on casting doubt on everything from the devices that the polices uses to the competency of their operators.
If you are a guy who got speeding in a 2006 Jetta? well pay the fine.
So while I can understand how a case involving complex financial fraud can be complicated I'm also quite aware just how easy it is to complicate things, I work for a consultancy which means I work with people who's their definition is to shuffle shit out of their mouth until the case gets complicated enough to warrant the hefty price tag they want to charge for that work, 10,000$ an hour lawyers should be able to bring that to a whole new level.
Well if the laser speedometer isn't accurate enough or isn't maintained properly then it shouldn't be enough to convict. If the evidence really is solid, throwing money at it won't make it go away.
A long time ago I had a job a consultant, preparing an internal report on a police force's LiDAR calibration department. Can't say that I share your confidence.
> That is a systemic problem, one which we don't have a good solution for.
Change the jury system/procedure to something better designed to generate trustworthy outputs. It seems simple enough in concept and there are many improvements that can be trivially suggested to improve the system even if we retained the idea of picking N people from the general population.
It's not that hard to understand. It's a framing issue. You could pull off the most complicated, Oceans 11 heist in history, and the prosecutor will dumb it down to you being, in the end, a "common thief."
These people are common thieves on an epic scale. They steal money, yes, but stability, security, futures, homes, and so on. But defense attorneys take the opportunity to make things seem complicated.
Lol, they aren't even trying, how can they lose if they don't even begun the suit. Lol, apologist failure.
The former top justice official is on record stating they don't prosecute becuase they fear systemic risk, ie too big to jail, too big to fail, all just mottos and lies to let your fellow country club members off the hook.
Half hearted at best. The flimsy article mentions three cases, one of which was a witch trial brought by Goldman Sachs.
Libor fraud? Pass. Money laundering for drug cartels? Pass.
Would you believe it just if someone robbed you, was caught and had a pay a fine of half the amount they took?
The government essentially allows criminal fraud by the powerful and then takes their cut of the profits, meanwhile the weak and poor continue to suffer, but luckily we got intellectuals who can explain away how its all too complicated.
Everytime I hear a finance person use the excuse of 'you wouldn't understand' to a complex, I can't help but correlate it to a developer who's obfuscated code tell another developer they wouldn't understand, without acknowledging that they obfuscated the code.
I'm sure I understand, you just don't want me to because then it would be obvious you are just ripping people off to make more money for yourself / company. Kind of like how the government has used 'enhanced interrogation' rather than the common definition of torture to get around breaking the law.
First off, this is coming from the prosecutorial side, who has every incentive to make the case as understandable as possible.
Frankly, it's not surprising that the average person can't understand complex finance and thus complex financial litigation.
> Everytime I hear a finance person use the excuse of 'you wouldn't understand' to a complex, I can't help but correlate it to a developer who's obfuscated code tell another developer they wouldn't understand, without acknowledging that they obfuscated the code.
The difference is that a jury is not other finance people. I don't expect jurors to understand financial crimes any more than I expect a random member of the public to understand a complex computer bug.
It's been my experience that this is very generally true, and you don't need the "finance" qualifier: people hate having their roles demystified to the point that they often don't even try to improve their own understanding of it.
Even if the person isn't greedy, they'll resent the loss of status that comes with, "wait, all you do is add entries on the CMS interface?" or "all you do is make the risks less obvious to auditors?"
As Mal says, "50% of the human race is middlemen, and they don't take kindly to being eliminated."
Even good, clear, code is inscrutable complexity to a lay-person. Finance is no different.
To me, it's more than a little ironic how often software professionals look at what finance professionals do and ask the equivalent of "why the hell does Twitter need all this code? It's just 140 character messages!"
a fifteen minute conversation with a layperson about a particular code base will do just fine. "You know how a car is simple to operate, right? But you understand it has an engine and many moving parts? Well.. Twitter is just like that, and there are actually lots of small engines making sure the characters get from your keyboard to other people's eyes."
> ... you just don't want me to because then it would be obvious you are just ripping people off to make more money for yourself / company.
Agree. If your car pollutes more than other cars and runs on the blood of innocent consumers, hiding that in the explanation of how a regular car works is not an excuse.
Anyone who says "You wouldn't understand" is hiding something. If you can't explain it to me, do you even know what the fuck you're talking about?
So a guy is charged with tax accounting fraud for basically not putting some number into some entry in a spreadsheet when some external event happened, and instead putting that number into a different entry in the spreadsheet. You can't just say "you know how cars are complicated? Well so are spreadsheets. That's why this guy is guilty." Your analogy has to capture some legally-relevant dynamic of the system you are trying to explain.
Imagine your case depends on proving that only a guilty person would have failed to shard a particular database. It's not enough to just explain at the highest possible level the concept of splitting up a database. You gotta get the jury to understand it enough to know why you do it, and why it would be so out of the norm to not do it in a particular situation that the person must have had a nefarious motive.
I am not sure you can explain a buffer overflow bug that easily to a layman. That's still a trivial bug for a developper. Most of the products involved in recent financial scandals are relatively simple to finance professionals. The problem was rather pretty much always a gross under estimation of the underlying risk combined with excessive leverage.
"Imagine if I told you to go to the file cabinet and remove the 8th folder in the Mason file. Well, it turns out that the Mason file only has five folders, and neither of us were careful to think about the boundaries. So you go and count off seven folders after the first Mason, but then end up grabbing a folder that's three into the Mitchell file.
"The data on a computer is organized into ordered bytes like the file cabinet, and telling a program to go to some byte's location plus some offset can result in it accessing data that it shouldn't touch, if other safeguards aren't in place."
"Ok, so say I need you to go and put this note of death at the end of the Mason file; that would be the 20th folder. You go to the drawer, count up to 19 from the first Mason folder and put the note there. You just ended up declaring Mr. Moriarty dead. Mr. Łeldon here will be processing credit card applications later in the afternoon; I'm pretty sure that Mr. Moriarty isn't going to get his now.
This is the way one uses the 'buffer overflow' problem in computers to manipulate data. With a little skill you can use it to do serious damage. Consider, for instance, what would happen if we were at an engineering company and slipped in a new blueprint for a machine instead of a personell note. Later someone else would pick up the design and the factory, none the wiser, would proceed to build our machine, instead of the one they wanted.
I don't buy the "you wouldn't understand" either. Here are simple explanations of a buffer overflow:
- We agree I'll give you max 1L of water, so you prepare a 1L bucket. Then I pour 2L of water into your bucket - you end up with a mess. (exploit version: We agree that if any water hits the ground, I can force you to do anything.)
- I give you card with typical form to fill in (squares for every letter). First 5 squares are for first name, next 5 are for last name. You fill in "Michael" as your first name overflowing into last name space.
- etc...
Sure, it doesn't capture all intricacies of the mechanism, implementation, side effects of the overflow, etc. But don't tell anyone they wouldn't understand the concept.
> Twitter is just like that, and there are actually lots of small engines making sure the characters get from your keyboard to other people's eyes."
That's an abstract explanation of what Twitter's code is, it doesn't get you anywhere closer to being able to actually understand the code.
Just like I wouldn't expect a layperson person to be able to find and fix a bug in a codebase, I don't think they can reliably evaluate the nuances of the financial system.
Your analogies don't help at all when it comes time to understand the details of said system, and evaluate whether or not a correct decision was made. When you need to reason about the details about a complex system, all analogies fall apart. The juries need to reason about details in a complex system and comparing Twitter to a "car engine" won't help a lay person understand why Twitter's fictional database layer is deadlocking and why the repair function shouldn't run during a transaction.
>If your car pollutes more than other cars and runs on the blood of innocent consumers, hiding that in the explanation of how a regular car works is not an excuse.
I think the takeaway here, is in the real world cars don't visibly run on the blood of innocent consumers. The means of procurement of gasoline is wrapped up in many different corporations, industries and nation-states which makes it incredibly difficult to ascertain blame.
I could make the argument that your volkswagen runs on the blood of innocent servants in Saudi Arabia. Who is at fault? Mercedes, Chevron, The Royal House of Saudi, A select few in that group, The American Government, or you?
I don't know about you particularly but I'm certain that there are a great many people who think that the financial system is ripping them off somehow when they really don't understand what's going on. Just look at High Frequency Trading & the Michael Lewis book. It comes up on HN every month or three and there are always people convinced that somehow these traders are "jumping in front of" other people's orders to steal their money when this is definitely not the case.
This sort of plausible deniability depends on there being financial instruments which are genuinely difficult to understand. I'm sure you would agree that there are in fact mechanisms and systems in computer programming which would be fairly difficult to explain quickly. Especially in terms which are anything approaching accuracy.
As software professionals we (some of us take) pride in trying to build stable systems that are decoupled and not overly complex. Financial systems seem to be build the opposite way.
Yet think of surviorship bias, isn't the code most likely to end up in front of a jury the hackiest, most complicated, least understandable, least documented stuff out there?
Think of the VW "scandal" at what point does a piece of code go from being a really effective emissions blocker to being an illegal emissions blocker? If they implemented and trained up a neural net then what piece of code is the violator, the guy who wrote the unit tests the neural net trained on, or the evolved coefficients in the network that humans never wrote, or the manager who told them to write an emissions routine using a NN or the regulators who entrapped them by knowingly writing bad regs with the intention of the .gov selecting winners and losers by selective prosecution?
Richard Bookstaber makes very similar points about the financial system in 'A Demon of Our Own Design', highly recommended.
When the investment banks were partnerships, the partners had plenty of 'skin in the game', and favored stable systems. Going public took the pressure off of the leadership's individual fortunes... and stability seems to have suffered.
They only seem that way to you because you do not deal in finance. A system can only be as simple as the business needs it's supporting whether than be a piece of code or a financial product. Some pieces of code are VERY complex because the business demands it. Same goes for financial instruments.
Is there a real reason for them to be so complex though? "Buisness demands it" isn't really a reason for me. It clearly affects the stability of the system, so shouldn't we look at ways of improving it overall?
Well you can't just say "them." That would be like saying "is there a reason that all that software is so complicated?" There are lots and lots and lots of different reasons for all the different pieces of code in the world. Same thing for financial products.
A finance person would probably say the exact opposite - most deals are just stacking two or three obvious, properly factored/decoupled abstractions together, whereas software people seem (to a finance person) to deliberately complicate things.
Keep in mind that in this circumstance, it's not the finance people who are claiming complexity. It appears to be the reaction from the jurors based on the case made by the prosecutors.
I wonder if a form of activism here might be to seek out Jury duty as a way to make sure the Jury does understand. To be honest I have never even thought about walking down to the Superior Court building and saying "Hi, I'm here to volunteer to be on a jury, what do you have today?"
This raises an interesting point, but neglects the fact that it's not possible (for good reason if you think about it) to simply volunteer for jury duty. In order to be eligible in most (all?) jurisdictions one must simply register to vote.
Neglecting the fallacy of the presumption that one can just volunteer, it is interesting to think about the way the world might be shaped should "more educated" individuals be the ones who solely shape public policy and case law. It's not very democratic in the pure sense of the meaning, but certainly interesting as a thought experiment.
>In order to be eligible in most (all?) jurisdictions one must simply register to vote.
I've seen states at least claim that being registered to vote is not necessary to be called for jury duty. It gets a bit hand-wavy after that but supposedly they also draw from, at least, driver licenses as well.
Just like drug offenses are insignificant compared to "small" time white collar crime, small time white collar crime is insignificant compared to what's going on in the financial sector. It brought the world as we know it to the brink of collapse. Some people in the financial sector were stocking up on food, water, fuel and firearms in case society would experience a meltdown. Not only did no one get convicted, but it's back to business as usual.
There seems to be a rule here. The punishment is inversely proportional to the scale of the crime.
It's also disgusting that there are only two states where inmates can vote. More disgusting that there are states where felons can't vote, ever, for the rest of their life. Making a mistake shouldn't remove your ability to be represented.
The racial aspect of this is perhaps the most concerning. In my home state of Virginia we have one of the worst problems with this and somewhere around 20% of black individuals cannot vote. (http://www.naacp.org/page/-/advocacy%20papers/Silenced%20in%...) while more than 7% of all individuals cannot vote. It amounts to a modern day 3/5ths clause and the worst part of it is that it's part of our constitution. Only the Governor himself can restore voting rights to an individual after they have been lost and while recent persons to hold office have been in favor of amending this part of the constitution, it's not a trivial process and in the mean time you have to get the felons themselves to apply to have their rights restored.
The problem is that the jury is made up of average people but they are expected to sit in judgement on something very complex and specialised. Instead I think that complex fraud cases should be made up of people that have expertise in that area. Or alternatively have a panel of three judges with expert knowledge sit in judgement.
You knew carrying heroin was risking jail time. Bankers and white collar business men do not think they are risking jail time in their daily decision making.
This is by design. As a crime, heroin possesion provides an easy way to assess guilty/not-guilty; the perpetrator either possesses heroin, or not. In contrast, white collar crimes do not provide an easy way to assess guilty/not-guilty. Clear fundamental truths (yes/no), beget clear legislation, beget clear enforcement.
How do you sentence someone as guilty of a white collar crime? You need to rely on legislation to define the law, because the law is what businessmen consider on a day-to-day basis. If the law allows them to make a decision, they should have every right to make that decision without fear of later prosecution for it.
The problem is not enforcement, it's legislation. If clearer laws defined the decision making affecting "white collar" crimes, then agencies like the SEC could implement clearer enforcement.
Unfortunately the world changes faster than the regulatory environment, so this conundrum is unlikely to ever change.
That's unfortunate about your drug conviction. Was the heroin really so attractive that you knowingly risked your career, livelihood and a year of your life for it or did you not understand the risks? I can appreciate you're angry but even if you don't like the law, you still have to follow it to keep yourself safe. Just as you would still have to pay off a protectionism gang to keep yourself safe.
The individuals who lost money most directly in the financial crisis are the people who gambled with their money trying to make more free money without doing any work. They're as much to blame, even more so that they're continuing to make the same gambles without even blinking! If your retirement fund is invested with a Wall St firm, you're part of the problem. Go put it with a company that isn't known to repeatedly rip off its customers. If you can't find one, then put it in a savings account. If the interest is too low, then accept that it's OK to have the occasional financial crisis as long as you make money all the rest of the time.
The only reason the juries "don't understand it" is because the prosecutor doesn't want them to understand. Remember that recent cop Grand Jury indictment where the prosecutor had to "explain" for 3 weeks how...I guess the cop wasn't guilty? While in non-cop indictments, they somehow manage to indict people much sooner.
> While in non-cop indictments, they somehow manage to indict people much sooner.
What does that have to do with TFA at all?
I'm 100% certain that the prosecutors of financial crimes are absolutely trying to get the jury to understand. A win in this space is great for your career and they have every reason to hope for it.
You sincerely think that the prosecutors in the cases mentioned in the article purposefully made the case hard for the jury to understand, for the explicit purpose of losing the case?
Yes. Don't know about those specific cases but I know places where this happens a lot, and especially when it comes to white collar crime, but also mafia-with-a-legit-front kind of affairs.
In my previous job, I saw a lot of federal criminal cases come up on appeal. In nearly every "blue-collar crime" case, it was clear the prosecution had the defendant dead-to-rights. E.g. the defendant tried to sell drugs to a cop; they arrested him and found X grams of cocaine on his person; they searched his house and found Y more grams.
Now, there is huge room for debate about, e.g., whether selling drugs should be illegal or whether people should receive jail sentences for stealing a TV. But in those prosecutions it's exceedingly rare that there is any doubt about whether the defendant actually did what he was accused of doing. The line between legal conduct and illegal conduct is clear and it's easy to prove when someone has crossed it.
White-collar crime is totally different. Selling stock, making out like a bandit on a deal, screwing someone on the other side of a transaction, losing a bunch of someone else's money--all those things can be legal or illegal depending on what you knew or said while it happened. Proving knowledge and intent beyond a reasonable doubt is really hard to begin with, and especially so when it comes to subject matter (like financial transactions) that are complex and difficult to understand.
And frankly, you wouldn't want it any other way. You really don't want the government coming up with creative prosecutions to get guys who did "bad" things but followed the letter of the law. That's not a society you want to live in.
To your point, I think a lot of this has to do with the way the law is written. "Blue-collar" crime involves laws that are much brighter lines. They involve things that have been outlawed for thousands of years. You generally can't take possessions from others. You generally can't kill people. I think that simplicity is a sign of good laws.
When we get to white collar crime, it gets too messy. Learn about companies before you buy their stock. But, don't learn certain things about them, because that's insider trading. This is confusing to juries because the concept itself is just confusing. We see behavior that we don't like -- "there outta be a law!" -- but it's hard to pin down the precise behavior that makes it bad. E.g.:
"Hey those bankers made a bunch of risky loans but didn't lose money during the recession when they went bust. There outta be a law!"
"Ok, so outlaw risky loans even if it means poor people will have a harder time buying a house?"
"Well, no. Help poor people get loans but don't let bankers make too much money selling risky loans"
Completely agree. If the government wasn't checked by the justice system we'd have witch hunts left and right. I'm not defending the financial industry (there seems to be a higher level of corruption relative to other industries), but every industry has its uglies and what we definitely don't need is the gov't pointing fingers and jumping to conclusions on the morality of business decisions. It sucks because the system is slow and frustrating and bad actors do get away, but the alternative is much worse.
Oh, that is the society we live in, they just make it so nobody is actually following the letter of every law in the first place, there's too many laws with too many letters. They can always get you if they want.
Except, apparently, according to the OP, if your crime is large and complex and financial enough.
One interesting distinction is white collar is often very binary. You did or did not have insider knowledge before you did that trade?
On the other hand for blue collar / property / violence crimes there are a bazillion analog levels. There are many levels and layers of criminal charges for killing someone ranging from "driver ran over a bicyclist" up to serial killer with punishment in proportion to level of intent and likelihood of repeating etc.
Its not that its hard to prove or there is little evidence beyond circumstantial, its that typical police going after a typical guy for typical things will bust someone frankly obviously at "level 5" and the prosecutor offers them the choice of a trial against charges of "level 4" or plea bargain out as guilty of a "level 3".
White collar crime tends not to have a sliding scale of criminal activity. Maybe a small dollar value is a misdemeanor vs a felony, but its very binary either you cheated or you didn't and one or two steps below the binary "did it" is you walk not even hit a grand jury.
This is before you get into theory about open conspiracy and control fraud. If everyone knows the whole structure relies on no bad apples and someone is a bad apple then what do you do, indict the entire economic system for having intentionally created a ridiculously cross connected system?
White-collar crimes are extremely analog, and those gradations are all inside someone's head instead of being an external quantity that can be measured (like grams of cocaine).
For example: pretty much whenever someone sells something, the buyer is going to be more optimistic about the value of the thing than the seller. At what point does that become fraud?
When the seller deliberately tries to deceive the buyer, or when the seller does not disclose something that the seller has a legal duty to disclose. In principle, it's not real hard.
(In practice, of course, it can get very complex and grey...)
I have really no insight into the US legal system but to me this seems to be almost entirely because people charged with "white collar" crimes are relatively wealthy and can afford a very vigorous defense.
There might be other issues as well such as
- a white collar employee being bit smarter, in terms of covering their tracks, ie don't use email, only take via phone or face to face. This makes these crimes much tougher to figure out.
- working in groups that ensure that everyone is equally guilty, ala the LIBOR fixing cabal. Having powerful friends is still a great deterrent to being charged with a crime. Look at the British child sex scandal.
- these crimes are much less publicized and incendiary. It's easy to get some people worked up over drug or assault crimes as they can put a face to a victim but with white collar crime its much tougher.
- their crimes tend not to affect other high power people.
- white collar crimes tend to be more sophisticated. If you believe this then it's not a stretch to think that you need to have better law enforcement working on these cases. This has always been the knock on the rating agencies, Moodies, S&P and Fitch, is that they need to be as good as the wall street quants to understand the new products but if they were that good then they wouldn't be working for the rating agencies.
I'm not sure I buy that argument completely but I believe that there is a bit of truth to it. I mean I know alot of quants on wall street and those that work for the rating agencies fall into two buckets, those that want to work 9-5 and those that aren't what I'd consider to be top tier quants.
Just look at the 2008 financial crisis. White collar employee's got rich leading up to it. and then to fix it, the US flooded the markets with money meaning that white collar employee's made even more money when fixing the mess.
Bernie Madoff's biggest failing was that he ripped off rich people.
Well, former US Attorney General Eric Holder took back his old job at the white collar law firm that represents these guys. Here's the money quote:
"Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence."
I'm not debating Eric Holder going back to his old gig isn't fishy, it certainly is. And the revolving door bt Wall Street and Washington is ridiculous.
But RollingStone has the most slanted, sensational coverage on anything Wall Street. Their accounts aren't journalism.
By Rolling Stone, you mean Matt Taibbi. Because he's the only reason Rolling Stone covers Wallstreet at all.
I'm not a fan of Taibbi's style, and I think that he jumps to biased conclusions. But I've read just about everything I've come across regarding the Financial crisis, and Taibbi has contributed substantial and important reporting to fill out the context of what exactly went down.
To me, Taibbi is a pretty good source for facts, since he wears his biases so openly on his sleeves, it is trivial to account for when he does reach. He also has a completely different perspective and motivational drive than the Financial press beat reporters who are afraid to stray too far from the self-serving accepted wisdom that's developed in the financial industry, as well as the broad audience reporters who are mostly afraid to dive into the minutia. Taibbi is highly idiosyncratic, but his perspective is valuable as long as you're taking in a spectrum of views and have an ability to bring a sense of skepticism to reported claims.
I appreciate this comment, but it seems a little like saying that William Randolph Hearst had a "completely different perspective and motivational drive" when investigating the sinking of the USS Maine.
I'm not sure that kind of 'reporting' is a net positive.
There's a lot I didn't like about Holder. But, compared to some predecessors, he's closer to being a saint than a sinner. It's all relative. :)
E.g. here's one of the worst offenders, only 40 years ago:
On February 21, 1975, Mitchell ... was found guilty
of conspiracy, obstruction of justice, and perjury
and sentenced to two and a half to eight years in
prison for his role in the Watergate break-in and
cover-up
Your analysis is inaccurate with regards to the article at hand.
Rich, powerful people were on both sides of the Dewey & LeBoeuf case. This is an example of rich people ripping off other rich people (usually investors). All of cases listed in the article follow this pattern.
However, you are correct with regards to the Libor scandal, which wasn't mentioned in this article directly, but would be a better example of serious crime against the public going almost entirely unprosecuted.
Bernie Madoff failed to avoid jail time because he employed a ponzi scheme - a type of fraud that is is (somewhat) easily understood and has a legal precedent of being successfully prosecuted. It also has the tendency to blow up spectacularly when it unwinds, and Madoff refused to implicate anyone else in the scheme, making it easier to hand him a harsh sentence.
His main accountant and auditor Frank DiPascali, on the other hand, cooperated fully with investigators and testified at the trial of 5 other high level members of the fraud. Although he could have been given over 100 years, he received 1 year home detention and 1 year of supervised release during his final sentencing in May 2015 (6 years after pleading guilty).
So it's not really about ripping off rich people, it's more about committing fraud in a very legally and technically opaque manner, passing responsibility down the chain (LIBOR), and never EVER committing it in a manner that can be recorded or traced.
This last point is widely believed to be the reason why GS recently fired ~30 new analysts. If they were negligent enough to cheat on a test in a trackable manner (googling answers on company computers), they represented a huge potential liability to the firm.
It think it's easier to prosecute people who rip off individuals, as Bernie did, rather than ripping off the general public. It's easy for people to see harm in the faces of the harmed (be they rich or poor) rather than failing to follow a complex law with an even more complex scheme. The harm to the public may be terrible but if you can't easily explain things to lay people, you might have difficulty over many months of tedious testimony getting them to care.
I think the real problem is that these miscreants are only able to rip off the public because government policy pushes the general public into a position where they are exposed to the risk of dealing with fraudsters. For example, decades of policy encouraging unsustainable home ownership in the leadup to the housing crisis. More generally, a policy of monetary devaluation that nudges individuals and retirement accounts, etc. Into risky investments (instead of stashing under the mattress). Fictional regulatory reporting requirements that make it easier to create the veneer of propiety than actually exercise it, etc.
So there is a problem that ultimately the government can't look too hard into these problems without making it glaringly obvious that the reason why the public is exposed to harm that would normally be against individuals is it's own fault.
White collar crime has plenty of indirect victims.
Fixing LIBOR had very real life-changing consequences for many people. They weren't as direct as a knife attack, but they still made a huge difference to the financial - sometimes also the personal - opportunities available to many people.
The difference is that most of those people would have had no idea they were being robbed. They would simply have had less money to spend - but they wouldn't have been aware why.
In a fair world there would be immediate compensation for all victims in the form of basic recompense plus punitive damages.
IMO that would be more effective in stopping white collar crime than the prospect of jail, because it would change the risk/reward profile and skew it more towards financial damage and loss of customer good will.
FWIW most "people in the street" got a net benefit from the LIBOR manipulation. The people on the losing side were mostly large traders - i.e. sovereign wealth funds and wealthy individuals (though admittedly also some mutual funds and similar organizations that ordinary folks invest with e.g. CALPERS).
This mostly shows off the silliness of the jury system. Why on earth does anyone think grabbing 12 randoms is gonna somehow lead to proper application of justice? I could see it when the US Founders may have thought it'd be other well-educated folks like themselves - it's a good check (if that's what they indeed intended, I don't know). Why would we think untrained folks are going to do a good job figuring out complex things and properly weighting evidence? Courts already have an issue with not understanding Bayes; adding to it by bringing in even less critical people isn't going to help.
The style is weird too. The juries don't seem to be able to do their own investigation; they are passive, relying on a presentation given to them. They should be able to ask questions, inquire about things like the base rate of an occurrence. And things like jury instructions, telling people to disregard info or their biases. This is simply not how human brains work. Let alone untrained ones. We'd be far, far, better off having a panel of judges. And proper review to identify systemic issues.
Someone said "If I'm guilty, I'd much prefer a jury; if I'm innocent I'd prefer judges".
I served on a jury for a murder case last year and think your characterization is not accurate (and only partially because I don't think I'm dim or plyant). Yes the prosecutors were clearly selecting for their own advantage but that doesn't necessarily mean dim or plyant. There's as much reason for one side to select for intelligence and skepticism as there is for the other to select for sheeplike qualities. During deliberation we did have a couple of folks who were imo way to casual hangemhigh types, but the majority were methodical and serious about getting it right and held the rest of us to a high standard. Juries are far from perfect, but the system has some merit.
I just served on a jury for a criminal trial (a police officer tipped off a suspected pedophile about an investigation).
The very first people to go were the idiots who couldn't string a sentence together. After that it was anyone who expressed the slightest anti-cop sentiment. The judge didn't even make the lawyers waste blackballs on them, she just summarily dismissed them for cause. The jury was two software engineers, a contractor, a pastor, some stay-at-home moms, a mechanic, a teacher and a geologist.
The American system was set up based on the real-life experiences of a group of humans who lived under an oppressive government. The "cultural DNA" recognizes that oppression is a natural state for authority and so what we attempt to optimize for, with varying degrees of success, is power federation.
This is not some abstract bullshit we use to justify arming ourselves. Very real suffering happens when power is consolidated with no checks, and the notion of trail-by-jury federates power in a very real way. Your opinion of the sensibility of this is not really a factor, to be honest.
Maybe trial by jury used to federate power, but with the current system of selecting only jurors that are "dim and pliable" as another commenter put it, I think this particular constitutional safeguard against power consolidation has been defeated.
The gold standard was once seen in the same terms- a necessary check on government power. It was supported by economic theory, moral principle, and countless examples of currency disasters in the absence of the gold standard. But eventually we got rid of the gold standard and very few economists want it back.
Even a system as old and battle-proven as trial by jury is not necessarily the best possible system today. Personally, I think it is still a good system, but that questioning it is still worthwhile.
You're missing key elements of History, which is skewing your perception of what motivated the events around the gold standard. I suggest you read about the crash of 1921.
It's not like trial by jury is an American invention. Like many other ex-colonies, the US basically kept the common-law legal system it inherited from English rule. Oddly enough, people who grumble most loudly about the malign influence of 'big government' seem to lean heavily (albeit often unconsciously) towards a civil law system, to the point of sometimes trying to parse Supreme Court cases by the standards of that approach.
That "resilience against an oppressive government" has already stopped working, as proven by NSA surveillance, civil assets forfeiture laws, Patriot Act, TPP, TTIP and others.
Perhaps you are failing to appreciate all the human suffering that occurred for these Enlightenment ideas to come into being and shape the thoughts of the first American legislators.
To think that governments can't become oppressive at the blink of an eye is not only short-sighted but ahistorical.
If you disagree with America's cultural DNA, your best option is to leave the country (honestly).
I have no doubt that the current jury system is highly suboptimal with regard to ascertaining guilt ("guilt" in the legal sense — as it pertains to a specific system of laws).
However, oldmanjay makes a very important point about how positive feedback loops tend to emerge from those who seek power (i.e., those who seek to control others will attempt to use the limited power they have in an effort to secure even more power). The checks and balance system serves the critical role of subverting some of the darker tendencies of human nature.
I'm certain a better solution exists that solves both problems — a system that determines guilt with high accuracy while maintaining resistance against corruption. I am not so certain that such a system will be implemented in the foreseeable future.
In short, they don't have jurors, but a panel of judges. The judges are not passive, as they are in the US. That is, in the US, judges are referees between two opposing sides. In Germany, the judges are active participants, and can inquire and guide the process.
And in most criminal cases there are jurors, called "lay judges".
The court is set up in such a way that at least one lay judge has to concur with a conviction (because of majority rules). So there is also a safety valve where "the common people" can stop oppressive prosecution.
Bayes rule should be taught before handing out highschool diplomas.
Differential calculus, trigonometry, and even geometry can wait. They are interesting topics, but statistics (with bayes) is something that is immediately applicable to typical situations encountered by the average citizen.
The should be taught what it means for a DNA test to be 99% accurate or at least it shouldn't be out of order for a lawyer to explain that as is currently the case.
Why should there be a few lessons by someone impartial on the subject matter? At the moment the system relies on expert witnesses who are called by one side or the other with an agenda.
I don't believe that it's impossible... while the complexity of the crime itself might be beyond most people's understanding, there is a virtually limitless toolbox at the hands of federal prosecutors, from RICO to conspiracy charges, which have exceptionally lower bars to proving guilt. The fact of the matter is that it has generally been the policy of the DOJ not to prosecute financial crimes under the purview of Eric Holder. This policy has recently changed but it's mostly too late to prosecute for the obvious amount of outright fraud that triggered the financial crisis of 2008. http://www.nytimes.com/2015/09/12/business/dealbook/justice-...
One solution to this is forcibly simplifying some aspects of business to make regulation easier. The Utility Holding Company Act[1] (enacted 1935, repealed 2005) is one such Depression-era law. It limited the complexity of the ownership structures of utility companies to make them easier to regulate. A number of laws like that were repealed in the 1999-2008 period, Glass-Steagall being the best known. Glass-Steagall kept banks out of the stock market, and stockbrokers out of banking. In 1999, the big banks convinced Congress that with their new risk models, the systemic failure of 1929 was no longer possible. They were wrong.
It's useful to go back to 1999 and read articles about the repeal.[3]
"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy."
"The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. "We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer."
One member of Congress got it right. "I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010," said Senator Byron L. Dorgan, Democrat of North Dakota.
You mean if you're trying someone of a crime related to a profession at least SOME of the jury should be trained in that profession? (I'd go for at least a third, or slightly less than half (half minus one) of 'closely related fields'.)
The article assumes that the defendants are guilty. It should assume that they are innocent and ask why prosecutors are trying people they can't prove are guilty.
At the same time, it was recently announced that the Icelandic bankers that were jailed after the Kaupþing Bank collapse lost their appeal in Supreme Court:
The "problem" here is that in many white collar cases, the defendants have the money to be represented by competent counsel and are thus confident in going to trial. Our system is setup so that most cases, when brought to trial with competent defense counsel, are a difficult win for the prosecution. This is as it should be.
Our insanely high conviction rates are the result of the extortion scheme that is our plea bargaining system - not because prosecutors are great at their jobs. It appears from this article that prosecutors are unhappy when defendants have the resources to avail themselves of the rights they have under our system of law, but I find it hard to imagine that they will find many people that are sympathetic to their complaints.
Maybe the solution is lawyers who know how to explain things better.
A trite solution, yes? But truthfully, if a lawyer cannot explain to the jury why this white-collar criminal deserves death (or whatever!), perhaps they should enlist some of the commenters on HN as translators.
Maybe it has. The financial sector has attracted many people who are extremely smart and skilled. Over the past few decades, they have designed some truly elegant (albeit maybe too chaotic) stuff. Even if prosecutors can find competent experts, trials devolve into expert duels. And juries just can't cope, especially with a "beyond reasonable doubt" standard.
I'll rephrase. Without them being able to comprehend what they're buying. It's one thing to not understand, and an entirely different thing to not mentally be able to comprehend the financial instruments people are buying.
I hate lazy heuristics like Betteridge's Law. The only thing it accomplishes is to make writers think 'hmm... if I'm going to explore this topic I should restate my title in some form other than a question so idiots won't skip it because it's a question.'
>The only thing it accomplishes is to make writers think 'hmm... if I'm going to explore this topic I should restate my title in some form other than a question so idiots won't skip it because it's a question.'
Which would result in more accurate, less biased and clickbaity headlines. I don't see the problem.
A few weeks ago, I was doing hard time with people who, due to fairly outrageous "re-offender" statues, were serving 15 years for stealing $50 items, or 5 for walking out of Home Depot with a couple hundred dollars in a cart.
These assholes steal millions, often from the elderly who trusted "the system", and just walk away scot free because the jury doesn't understand it? It is beyond outrageous and really shows, to me at least, how our entire CJS in the US has become an sick disgusting joke.
I got 15 months for having a small amount of heroin and an oz of weed...I almost lost almost everything I owned and left my clients in a big mess, and these guys don't get any time or even a felony conviction to mess up their lives like mine does?
Fuck them and fuck the douchebag prosecutors who are afraid of losing one damn case and messing up their all important conviction ratio.
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